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EPA calls claims about Clean Power Plan restructuring 'hyperbolic'; 50% increase in royalties proposed in coal lease reform

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EPA calls claims about Clean Power Plan restructuring 'hyperbolic'; 50% increase in royalties proposed in coal lease reform

TheU.S. EPA believes Section 111 of the Clean Air Act was "thoughtfully andcarefully" applied to create the Clean Power Plan and the agency'sauthority to regulate power plants for carbon dioxide has been firmly backed upby the U.S. Supreme Court.

In abrief filed March 28 with the U.S. Court of Appeals for the District ofColumbia Circuit, the EPA called the opponents' claims that the Clean PowerPlan will result in a restructuring of the entire electric grid "hyperbolicmischaracterizations." The agency argued that the rule follows trendsalready underway in the industry — a fact repeatedly by EPA Administrator GinaMcCarthy since the Supreme Court granteda stay of the rule Feb. 9. The agency does not believe that the Clean PowerPlan's goals are unachievable,as its detractors have maintained. The EPA said opponents' attacks on theagency's interpretations and analysis of the Clean Air Act lack merit and thecarbon rule appropriately carries out Congress' intent to cost-effectivelyreduce pollution and protect public health and welfare.

Thenext step in the U.S. Department of the Interior's effort to address concernsabout the federal coal lease program will consider an array of new policyproposals intended to update the current approach, including a 50% hike inroyalty payments for some U.S. producers.

AnnouncedMarch 24, the next step in the review process involves a ProgrammaticEnvironmental Impact Statement, or PEIS, which will include a series of sixpublic meetings to solicit input to inform the scope of the review while theagency enforces a moratoriumon new leases.

Mostnotably, the meetings will consider an increased royalty rate on surface miningto 18.75% from the current 12.5%, matching the current rate for offshore oiland gas production in federal waters. Meanwhile, the PEIS makes no mention ofany possible increase in royalty rates paid by underground mines, which iscurrently set at 8%.

TheU.S. Department of the Interior's Bureau of Land Management launched its noticeof intent to conduct an environmental review stage as part of its comprehensivelook at the federal coal-leasing program.

In aMarch 24 news release, the agency revealed a notice of intent to conduct aProgrammatic Environmental Impact Statement, or PEIS, the next step in thereview of a program that allows coal companies to mine on federal lands. Aspart of the PEIS, a series of six public meetings will be held to solicit inputto inform the scope of the review while the agency enforces a on new leases.

"Aswe undertake this review, we look forward to hearing from the public on a widerange of issues, including how, when and where to lease federal coal, how toaccount for the environmental and public health impacts of federal coalproduction and how to ensure that American taxpayers earn a fair return for theuse of their public resources, including whether current royalty rates shouldbe adjusted."

DC Circuit unlikely to hear challenge to EPA's new source rule until2017

TheU.S. EPA's carbon reduction rule for new power plants will not see its day incourt until December at the earliest, but more likely in 2017 based on a newbriefing schedule issuedby a federal appeals court March 24.

Therule is a companion to the Clean Power Plan, which established performancestandards for existing fossil fuel-fired power plants. The new source rule doesthe same for new coal- and natural gas-fired generators. Both of the rules arebeing challenged in the courts. The U.S. Court of Appeals for the District ofColumbia has fast tracked the challenge against the Clean Power Plan andscheduled oral arguments for June 2.

Coalinterests were shocked to find the extent that permit fees would have toincrease in order for the industry to shoulder the state's regulatory expenses,the Pittsburgh Post-Gazette reported March 29.

Currently,permit fees paid by coal mine operators cover around 5% of the state's expensesfor authorizing and overseeing the mines while the rest is drawn from the state'staxpayer-funded general fund. To facilitate full funding by the industry, thepermit fee for an underground mine would have to increase almost 1,200%, risingfrom $5,750 to $74,000, while fees for surface mining permits and anthraciteunderground mining permits would increase over 600%, the report said, citingthe draft proposal the Pennsylvania Department of Environmental Protectionreleased in February.

Republicanlawmakers March 23 blasted key priorities of the U.S. Office of Surface MiningReclamation and Enforcement, including the agency's controversial proposedStream Protection Rule and requests to raise reclamation fees for coalproducers.

Amongother complaints, GOP lawmakers repeated concerns about OSMRE's draft StreamProtection Rule released in July 2015. The rule, which has yet to be finalized, would create newwater monitoring and restoration requirements for coal producers operating inand around streams that mining companies fear will slash jobs and limitproduction. In addition to opposingthe regulation, many coal-mining states have said they were not properlyinvolved in therulemaking process, a major source of criticism from Republican lawmakers.

"I'mgoing to be a strong advocate to make sure that the … the AppropriationsCommittee withhold funding to OSMRE until they decide to comply with the willof the people, not the will of the President, and not with the will of Mr.Pizarchik," Rep. Bill Johnson, R-Ohio, said at the hearing.

Afternine months of impasse, Pennsylvania Gov. Tom Wolf is letting theRepublican-controlled Legislature's $30 billion 2015-2016 budget become lawwithout his signature in order to allow the funding of public schools and otherservices in the short term.

ButWolf is vetoing an accompanying fiscal code that seeks to give the Legislaturefinal say over compliance with the U.S. EPA's Clean Power Plan. However, theDemocratic governor is warning that a $2 billion deficit still looms for2016-2017 despite cuts in the latest budget.

Amongthe many problems Wolf has with the fiscal code is Section 1723-E., whichrequires that any compliance plan for the Clean Power Plan that is drafted bythe state Department of Environmental Protection be submitted to theLegislature for approval 180 days prior to submission to the EPA. The sectionallows "either chamber to unilaterally disapprove the plan, causing DEP tohave to amend the plan as directed by the legislature," explainedSheridan. "This process is … an unwarranted intrusion into executiveauthority," he added.

Tribalconservation organizations failed in their quest to overturn a nitrogen oxideemissions rule concerning the coal-fired Navajo Generating Station in Arizona.

TheU.S. District Court for the Northern District of California the organizations' lawsuitagainst the U.S. EPA and the Department of the Interior on March 22, saying thecourt lacked jurisdiction because petitions for review of EPA actions must beconsidered exclusively in federal appeals courts.

Thelawsuit alleged the Navajo plant and the Kayenta Mine, as the plant's fuelsupplier, hurts the broader Navajo community by overusing water and otherresources and polluting the air with emissions that cause asthma and heartattacks and premature deaths.

"Nomatter how the plaintiffs frame their lawsuit, its practical effect is tochallenge the EPA's rulemaking," U.S. District Judge Vince Chhabria said,concluding that seeking to vacate a final rule and remand the matter back tothe federal agencies for further proceedings is exclusively a matter forappeals courts.